[00:00] Including this hedge fund manager that explains&nbsp; exactly how he uses it in an interview. But we&nbsp;&nbsp; and demand in the first place? To understand that, we have to dive deeper&nbsp;&nbsp;
[00:15] into the core concepts of why the market moves Why does the market move in the way that it does? &nbsp; is more buying pressure than selling pressure. The only way a chart will move down is if there&nbsp;&nbsp; oh tradinglab that is so obvious. Why are you&nbsp; wasting our time and even telling us this &nbsp;
[00:35] A lot of people will watch a youtube video,&nbsp; get told to draw some fancy rectangle on their&nbsp;&nbsp; chart by a random trading guru because&nbsp; they say it works, but in reality the&nbsp;&nbsp;
[00:47] are told it works. But not my viewers! &nbsp; You guys are smart. You actually want to learn. So look at this picture. &nbsp;
[01:00] The red, represents the sellers winning. The green, represents the buyers winning. &nbsp; When you have a ton of sellers. Like in&nbsp; this area, price will drop fast and sharp. &nbsp;
[01:12] As price starts to go down, more and more&nbsp; buyers will start to fight against the sellers. &nbsp; Slowly gaining back control. Now as more and more buyers are entering,&nbsp;&nbsp;
[01:24] this can cause little pullbacks on the chart. But&nbsp; the chart s momentum is still overall bearish. &nbsp; Price will only fully reverse once there is a&nbsp; large majority of buyers compared to sellers. &nbsp; will be fast sharp move to the upside. Then the whole process repeats itself. &nbsp;
[01:43] how the market moves. You see, one day I got bored&nbsp;&nbsp; articles when im bored. I m a nerd. Anyways, I was reading an article that&nbsp;&nbsp;
[01:56] interviewed a hedge fund manager&nbsp; and how he looks at the market. &nbsp; But before we get to what he&nbsp; said, let me show you something. &nbsp; Before sharing it with you guys, I wanted to test&nbsp; it out for myself to see if it actually worked. &nbsp;
[02:13] So I funded my trading account&nbsp; with $50,000 for testing. &nbsp; I Found the guy, who seemed to be&nbsp; pretty good and had a high win rate. &nbsp; So all I had to do was click this follow and my&nbsp; account would automatically take all the trades&nbsp;&nbsp;
[02:30] this specific trader took automatically. The analyst has taken 5 trades since&nbsp;&nbsp; So far my account is up $7,646 Not bad for just clicking a follow button. &nbsp;
[02:44] But ill proceed to update you guys through out the&nbsp; weeks to let you know how my account is doing. &nbsp; you can check it out. Okay back to the video. &nbsp;
[02:57] that really stuck out to me. you need to focus on who is on&nbsp;&nbsp; the other side of the trade Whenever you buy a position. &nbsp; Which means, there is always someone who&nbsp; thinks the chart is going to go in the&nbsp;&nbsp;
[03:13] opposite direction than what you think. Now this is a very VERY important&nbsp;&nbsp; from someone who is selling. Would you rather&nbsp; buy from a good trader or a bad trader? &nbsp; someone who is inconsistently profitable. If you start thinking like this when trading.&nbsp;&nbsp;
[03:31] It will change the way you take trades. if you don t know where these profitable&nbsp;&nbsp; traders are selling, you might just be one&nbsp; of those bad traders they are selling to. &nbsp; Going back to this chart. The only way we know a large&nbsp;&nbsp;
[03:46] group of sellers or buyers are in complete&nbsp; control is if there is a sharp move. &nbsp; So take this chart for instance. When I look at this chart. I m not&nbsp;&nbsp; trying to predict the future. I m just looking&nbsp; at where the majority of buyers and sellers are. &nbsp;
[03:58] Here, the chart had a sharp downwards move from&nbsp; this point. Meaning there were way more sellers,&nbsp;&nbsp; than buyers from this point on. In other words, an area of supply. &nbsp; If there wasn t drastically more sellers&nbsp; at this point. Price would just continue&nbsp;&nbsp;
[04:14] moves sharp to the downside. Here the opposite is true. &nbsp; than sellers. Or an area of demand. Another way to look at this is like this: &nbsp;
[04:29] You can buy anything from there. But what is costco s business plan? &nbsp; Them what do they do? They sell it to a retail&nbsp;&nbsp;
[04:41] money is if they sell to a quote on quote&nbsp; bad buyer or someone who is willing to&nbsp;&nbsp; pay more than what they did for the product. You should look at trading the exact same way. &nbsp;
[04:54] Obviously at a low price. Where are you selling to&nbsp;&nbsp; the retail buyer? At a high price. Now remember that statement I made before? &nbsp; In order to be a winning trader, you&nbsp; have to sell to a losing trader. &nbsp;
[05:07] be buying most likely? A lot of retail traders&nbsp;&nbsp; will buy in this area, maybe because they see&nbsp; some momentum building up, an indicator tells&nbsp;&nbsp; them to enter, or whatever the reasoning is. But they are missing a very important key point. &nbsp;
[05:21] Supply exceeds demand in this area. Meaning there are drastically more&nbsp;&nbsp; buy when there are more sellers. So when looking at this chart you should&nbsp;&nbsp; there are drastically more buyers and sellers. And where are the bad traders buying and selling. &nbsp;
[05:39] If you answer these two questions&nbsp; correctly, you will be a profitable trader. &nbsp; So where are the majority of buyers and sellers? Well we can see from this point on,&nbsp;&nbsp; drastically more buyers then sellers. So we mark the beginning of this move. &nbsp;
[05:56] Where are there more sellers than buyers? Here we have a sharp downwards move. &nbsp; So we mark the begging of this move. I want to make this very very clear. &nbsp; If the chart looks something like this. We don t have a clear area of supply and&nbsp;&nbsp;
[06:09] demand because there are no sharp movements. Sure, the chart moves down from this&nbsp;&nbsp; area. But that just shows there are&nbsp; slightly more sellers than buyers. &nbsp; drastically more sellers than buyers. Which we can only tell, if there&nbsp;&nbsp;
[06:23] because its very important. Then we have to ask the final question. &nbsp; A bad trader is going to sell when&nbsp; there are more buyers than sellers. &nbsp;
[06:36] So we have our supply and demand areas. Wait for price to come to our demand. &nbsp; Set our stop loss below the area of demand. Set our take profit at the area of supply. &nbsp;
[06:49] And we sell to the inconsistently&nbsp; profitable trader who buys up here. &nbsp; video. Here s two extra tips to make your&nbsp; supply and demand zones even stronger. &nbsp;
[07:44] So heres a final recap of the&nbsp; perfect supply and demand trade &nbsp;
[08:14] Here we have a strong move to the upside starting&nbsp; from this candle so we mark our demand zone. &nbsp; Notice how there is also a fair value&nbsp; gap connect to this demand zone. &nbsp; Giving us insight there are&nbsp; buyers than sellers in this area. &nbsp;
[08:28] We wait for price to see what it does next. A similar thing happens up here. &nbsp; This is our area of supply. This move also has a fair&nbsp;&nbsp; value gap connected to it as well. Which is showing there are a lot more sellers&nbsp;&nbsp;
[08:44] Next we want price to slowly come&nbsp; down to our area of demand. &nbsp; Slowly being the key word. Once it hits our zone. We enter. &nbsp; Set our stop loss below the area of demand and&nbsp; set our take profit at the area of supply. &nbsp;
[08:59] And just like that, you got a winning trade. Start looking for areas where bad traders are&nbsp;&nbsp; buying and selling and it will change&nbsp; the way you trade forever.